Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Life InsuranceMedium
A client, aged 68, has a substantial amount in a Traditional IRA. According to current IRS regulations, when must they begin taking Required Minimum Distributions (RMDs) from this account?
- ABy April 1st of the year following the year they turn age 73.
- BBy December 31st of the year they turn age 73.
- CBy April 1st of the year following the year they turn age 70½.
- DBy April 1st of the year following the year they turn age 72.
Show answer & explanationAnswer & explanation
Correct answer: A. By April 1st of the year following the year they turn age 73.
Under the SECURE Act 2.0, the age for beginning Required Minimum Distributions (RMDs) from Traditional IRAs was increased. For individuals who turn 73 after December 31, 2022, RMDs must begin by April 1st of the year following the year they turn age 73.
Why the other options are wrong
- B. While RMDs must be taken by December 31st each subsequent year, the FIRST RMD for age 73 can be delayed until April 1st of the following year.
- C. This was the RMD age prior to the SECURE Act of 2019.
- D. This was the RMD age under the original SECURE Act (2019) for those turning 70½ after 2019.
RMDs from Traditional IRA (SECURE Act 2.0)
Required Minimum Distributions (RMDs) are amounts that Traditional IRA owners must withdraw annually starting when they reach a certain age. Under SECURE Act 2.0, for those turning 73 after 2022, the first RMD must be taken by April 1st of the year following the year they turn 73.
- Applies to Traditional IRAs (and other qualified plans)
- Prevents indefinite tax deferral
- Age 73 for those turning 73 after 2022 (SECURE Act 2.0)
- First RMD can be delayed until April 1st of the following year
- Subsequent RMDs must be taken by December 31st each year
Memory trick: Seventy-Three, then April first, for your RMD thirst.